Life insurance Corporation gets clearance to do business in Bangladesh

Bangladesh has granted permission to India’s state-owned insurance group Life insurance Corporation (LIC) to do business in the country.

It was announced by M Shefaq Ahmed, Chairman of Bangladesh Insurance Development and Regulatory Authority (IDRA).

LIC will start its operations in Bangladesh as a joint venture (JV) entity to be called LIC Bangladesh Ltd with a paid up capital of one billion Taka.

In this JV entity LIC will hold half of the amount while the rest would be owed by its Bangladeshi partners. The capital will be raised from the Bangladesh’s capital market and local entrepreneurs.

Earlier in 2013, Bangladesh IRDA had rejected LIC’s proposal to operate in the country citing small capital base.

It should be noted that LIC will be the second foreign insurance company to operate in Bangladesh after the US-based MetLife-ALICO.

LIC has been in the insurance business for six decades after it was established in 1956. It was established after Indian Parliament had enacted Life Insurance of India Act, 1956 for nationalising the private insurance industry in India.

Presently, LIC is worth over 15,000 billion Indian rupees and operates in Nepal, Sri Lanka and Singapore apart from India.